Skip to content

IMF expects UAE economy to shrink 3.9% in 2026 and rebound 7.7% in 2027

1 min read

Evening traffic on a wide Dubai highway lined with tall towers, with light trails from cars Economy
Evening traffic on a wide Dubai highway lined with tall towers, with light trails from cars

The October World Economic Outlook sees growth returning as oil exports, trade and tourism recover; the UAE Central Bank projects 1.6% growth this year.

The International Monetary Fund expects the UAE economy to contract by 3.9% in 2026 and grow by 7.7% in 2027, according to its October 2026 World Economic Outlook and Regional Economic Outlook, Economy Middle East reported on 22 October. For Saudi Arabia it forecasts a rebound of 7.9% in 2027.

The IMF expects the rebound to come from restored hydrocarbon production and exports and from recovery in trade, tourism, aviation, shipping and logistics. Its baseline assumes that regional disruption eases during 2027 and that trade and shipping gradually return to normal; delays could change the size and timing of the recovery.

The Central Bank of the UAE is more optimistic about this year. Its September 2026 Quarterly Economic Review projects real GDP growth of 1.6% in 2026.

Official data so far show real GDP up 0.4% in the first half of 2026, with a 2.1% fall in the second quarter. Non-oil foreign trade rose 13.1% to AED 1.937 trillion in the first half, and non-oil exports grew 23.9% to AED 452.8 billion.

The gap between the forecasts reflects how uncertain the path of the conflict is. Businesses planning budgets for 2027 may want to model both a slow and a quick return of regional shipping and air traffic.

Sources